1. Articles of Association Contains the rules, regulations and by laws of the general administration of the company. It need to be registered along with the memorandum. S.26-The companies which must have AoA Unlimited companies Companies limited by guarantee Private company limited by shares Not mandatory for public companies S.27-Mandatory regulations in AoA of Unlimited companies, guarantee company and private company limited by shares.

2. Features of Articles of Association It constitute a contract between the shareholders &the company. And between the members interse.(s.36-effect of MoA &AoA- binding force of MoA &AoA). Articles must not conflict with the provisions of the Act or any other law for the time being in force.(s.9 gives overriding effect to the act) Examples-s.439-petition for winding up of a company in certain cases S.205- no dividend shall be paid by the company except out of the profits- company can not incorporate any clauses in the AoA to do away with or it can not exclude these provisions.

3. Sch.1 of the Companies Act contains model forms of memorandum and Articles of AoA A company limited by shares may either frame its own set of articles or may adopt all or any of the regulations contained in Table- A(S.28(1) Other companies may adopt Table C,D or E to Sch.1 Form and signature of Article is contained in s.30

4. Articles must not contain anything the effect of which is to alter a condition contained the memorandum or which is contrary to its provisions. AoA is subordinate to MoA If there is a conflict between AoA and MoA MoA would prevail over it.

5. Alteration of Articles of Association-s.31 Every company have the power to alter its articles of association by a special resolution. Limitations on the power of alteration 1)It must not be in contravention of the provisions of the Act. 2) The power of Alteration in the article is subject to the conditions contained in the MoA. 3)An Alteration can not require a member to purchase more shares or increase his liability in any way except with his consent in writing.(s.38- effect of alteration in the MoA or AoA) 4)Alteration must not constitute a fraud on the Minority

6. Alteration in the Articles as to converting a public company into private company- approval of the central govt. Proviso to S.31(1)

7. Restriction on Alteration of AoA- cases Allen v. Gold reef of west AfricaLtd[1900]1Ch.656 Greenhalgh v. Adrene Cinemas Ltd [1951]1Ch.286 Peter’s American Delicacy v.Heath(1938)61CLR 457 Gambatto v. WCP Ltd (1995)182 CLR 432

8. Doctrine of constructive notice Every person dealing with the company was treated as having the knowledge of the contents of the memorandum. (Public documents of the company). It seeks to protect the company against the outsider. Imputation of knowledge –whether the party concerned has actual knowledge or not.

9. A member of the company can sue for an injunction to restrain the company or its directors from doing an ultra vires act. All contracts made by the company for an ultra vires purpose are void and can not be ratified and validated by any kind of resolution passed by the general meeting of the company or even with the unanimous consent of its members.

10. Doctrine of indoor management The rule in Royal British bank.Turquand(1856) Persons dealing with the company are assumed to have read the public documents of the company and to have ascertained that the proposed transactions are not inconsistent there with, they are not required to no more,they need not inquire into the regularity of the internal proceedings and may assume that all is being done regularly. It operates to protect outsiders against the company. The rule is beneficial for convenience in business relations. An outsider is presumed to know the constitution of a company, but not what may or may not have taken place within the doors that are closed to him.

11. The Rule in Turquand may extend to A)A defective appointment of the director or a director continuing to act for the company after he cease to be a director B) Failure to hold a properly convened board meeting to authorize the transaction C) Disregard of the limitations imposed on the directors authority by the MoA or AoA Exceptions to the rule in Turquand’s case 1)Persons having knowledge of irregularity 2) Persons on inquiry 3) Forgery